Thursday, November 19, 2009

Not in Harmony

Next July Ontario and British Columbia will implement a new tax that will apply to natural health products and a vast range of complementary and alternative therapies. Natural health advocates say the harmonized sales tax will punish people who practise and promote preventive well-being.

The harmonized sales tax (HST) will combine the provincial, or retail, sales tax (which is 7 percent in BC and 8 percent in Ontario) with the 5 percent federal goods and services tax (GST). This will result in an overall tax of 12 percent in BC and 13 percent in Ontario, respectively. The HST will apply to natural health-related goods and services previously covered by the GST but not the PST, including vitamins, supplements, and herbs. This means a potential 7 or 8 percent price increase at the retail level. Consumers are sure to feel the pinch.

The increase will also apply to certain complementary treatments such as traditional Chinese medicine (TCM), acupuncture, shiatsu, and homeopathy. Some health services, such as physiotherapy, chiropractic care, and psychological care are already GST exempt which means they will also be HST free.

A short-sighted approach

Peter Wood, president of the Traditional Chinese Medicine Association of British Columbia, says that preventive health care saves the health care system money in the long run.

“Preventive and holistic medicines such as TCM have been proven to save countless tax dollars in medical bills, hospitalizations, and sick days from work, not to mention their positive impact on people’s general sense of well-being,” Wood says.

“This HST would be a great step backward in our medical system’s goal of becoming sustainable. A system reliant solely on pharmaceuticals and surgeries simply does not have financial or medical integrity.”

Ron Rosenes, vice chair of the Canadian Treatment Action Council, which helps people living with HIV/AIDS, describes the move to tax health products as “counterproductive.” “I’m extremely unhappy about this going ahead at a time when we should be focusing on being proactive about our health. The HST only increases the cost of keeping people healthy, when the goal should be to encourage prevention,” says Rosenes.

A double standard

Prescription pharmaceutical drugs are not subject to the GST and will be HST exempt. Proponents of natural health argue that taxing goods and services that foster preventive well-being reflects the way complementary health has yet to be embraced by the medical establishment and the government.

Penny Marrett, president and CEO of the Canadian Health Food Association, says that the CHFA questions why natural health products are taxed at all.

“If natural health products are assisting people to stay as healthy as possible—and we know that’s true—why are we taxing them in the first place?” she asks.

For proof of the benefits of natural products, consider some of Health Canada’s own recommendations. The federal organization recommends that all women who could become pregnant should take folic acid daily to prevent neural tube defects, for instance, while adults over age 50 should take a daily vitamin D supplement to enhance bone health.

“Why are we in a position where these products are taxed?” Marrett says. “You also have to ask, isn’t the goal of the Public Health Agency of Canada to promote the importance of people keeping themselves as healthy as possible?”

Cost savings

HST supporters contend that the tax will save businesses money and increase their efficiency. Ottawa is offering billions of dollars in transition funds for governments that sign on. But while the government sees cost savings and efficiencies in tax collection, for consumers the jury is still out.

Saskatchewan, Prince Edward Island, and Manitoba are considering switching to the HST but have expressed concerns about its effect on consumers.

Newfoundland/Labrador, Nova Scotia, and New Brunswick introduced the HST in 1997; however, the combined tax is said to have resulted in a lower overall tax rate.

To stop the HST, Marrett is urging people to contact both their Member of Parliament and their provincial government representative to voice opposition. (See below to find out how.)

“We need to tell [the government] why it needs to turn this around, that these [products and services] should not be taxed at a federal level and therefore not taxed at a provincial level.”

Stop the HST on natural health products

If you want to let the government know how you feel about the proposed HST, email your elected representative.

In Ontario
Contact your member of provincial Parliament (MPP) at:

Contact your member of the legislative assembly (MLA) at:

Contact your member of Parliament (MP) at:

Gail Johnson is a journalist who specializes in health matters.

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